Tullow sells Kenya assets to Gulf Energy’s Auron for $120m to focus on West Africa. Deal includes royalties and future payout triggers.
Nairobi, July 2025 – UK-based oil explorer Tullow Oil Plc has signed a binding deal to sell its entire Kenyan operations to Auron Energy E&P, an affiliate of Gulf Energy, for $120 million. The agreement will see Tullow exit Kenya completely as it refocuses on core operations in West Africa.
The deal involves the full transfer of Tullow Kenya BV, which owns stakes in the South Lokichar Basin – an area believed to hold 463 million barrels of 2C contingent resources, although it has yet to produce oil commercially.
How the Money Will Be Paid
Tullow will receive the $120 million in three stages:
- $40 million when the deal is finalized (expected in late 2025)
- $40 million after Kenya approves the Field Development Plan (FDP) or by June 30, 2026
- The final $40 million will be paid starting Q3 2028, if Brent crude prices stay above $65 per barrel. If not, a fallback payment will be made by 2033
Tullow will also earn a $0.50 per barrel royalty on 80% of any future oil produced from the assets. Notably, the company has secured a no-cost re-entry option of up to 30% if a new partner joins the project in later development phases.
Why Tullow Is Leaving Kenya
The move comes as part of Tullow’s broader plan to sell off non-core assets and reduce its debt. Earlier this year, it completed the sale of its Gabon operations for $300 million, bringing its total 2025 proceeds from divestments to $380 million.
According to Tullow:
- The Kenya unit will be marked as “held for sale” in its H1 2025 report
- It had a book value of $112.2 million as of December 2024
- The deal is expected to boost its operating profit by $145 million, largely by removing old exploration costs from its balance sheet
The buyer, Auron Energy, will also take over all environmental and decommissioning liabilities, once approved by the Competition Authority of Kenya (CAK).
What’s Next for Tullow?
Tullow plans to use the cash to reduce its refinancing risks and prepare for a capital restructuring later this year. Its new strategy centers on boosting returns from producing assets in Ghana, Côte d’Ivoire, and elsewhere in West Africa.
This deal marks the end of Tullow’s long and often troubled presence in Kenya. The company had once hoped to pioneer East Africa’s oil industry, but delays, high costs, and a lack of investors slowed progress for over a decade.
